Buying Home: 10-20-80 formula will be useful in buying a house, this small calculation will help in building a home..

Everyone wants to buy a house, but it is not an easy task. A middle-class person spends all his savings on buying a house. At the same time, if the money falls short even after doing so, then a home loan has to be taken for it. In such a situation, a big question arises when should a person buy a house? This is also the question of what kind of house should be bought, that is, how much money? The 10-20-80 formula will help you. Let us understand through calculations when you should believe that you are ready to buy a house.

What is the 10-20-80 formula?
For whatever amount you are going to buy a house, you should have about 30 percent cash for a down payment. Out of this, you can pay 20 percent as a down payment, and with the remaining 10 percent money, you will have to pay for its registry, some minor expenses, etc. on buying a house. At the same time, you will get the remaining 80 percent amount through a home loan.

Are you eligible to take a home loan at a low interest rate?
After this, you have to check whether you are eligible to take a home loan at a cheap interest rate. When you take a home loan, your biggest aim should be to try to reduce the interest rate on the loan to the minimum. This will be possible only when your credit score is very good. Let us tell you that for a good credit score, you should have a good credit history.

Check whether you are ready to make a long-term investment.
Buying a house means that you will not sell it in 2-4 or 10 years and buy another house. In such a situation, the decision to buy a house is a long-term decision. If you have made an EMI of 30 years, it means that you will spend half your life repaying the home loan. So before buying a house, see what responsibilities you have and what responsibilities you may have to fulfill in the coming years. According to that, you can decide whether you should buy a house or not.

Check EMI according to salary
Although there is no rule on how much EMI you should keep according to your salary, if seen generally, then you should not keep the EMI of a home loan more than 20-25 percent. Suppose your salary is 60 thousand rupees in hand, then your home loan EMI should be 12-15 thousand or a maximum of 20 thousand. This is because in the remaining 45 thousand rupees you will have to pay house maintenance, electricity-water bill, child's school fees, cab charges, household ration, petrol expenses, clothes and eating out expenses will all be included. Not only this, you will have to save money from the same salary for your old age and also keep money for the child's education and marriage. Apart from all this, you will also have to keep some money as an emergency fund.

In this way, while buying a house, first of all, you have to see what is the price of the house. After that, you have to check whether you have enough cash to make its down payment or not. After that, you will also have to see how much your EMI is and whether it is more than 20-25 percent of your salary or not. If you meet all these criteria, then you are ready to buy a house, but if there is even one of these criteria which you are not meeting, then you should wait to buy a house.

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